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It looks like Harvard is at it again. First the university began offering financial aid to families making up to $180,000–and full-rides for those with family incomes of less $60,000! Now a few very recent Harvard alums have teamed up to make no-interest loans a reality for Harvard attendees.
Paying it Forward
When the founders of UniThrive.org graduated (one last year, and the other two just this year) they immediately started putting their collegiate connections to work: they began building a network of alumni lenders who to loan college funds to students following in their footsteps.
They’ve started small. Since the website’s launch they have signed up only 73 alumnni lenders and only 8 students in need of funds, but the terms will undoubtedly make UniThrive’s loan process quite appealing to both students and lenders.
How it Works
Much like other peer-to-peer lending sites we’ve seen in the past, UniThrive allows students to post a profile detailing a bit of their personal history (to help plead their case) and the details of their loan needs. Alumni can then choose students they feel a kinship with–maybe because of a shared major, hometown, or story–and offer to lend them some much needed cash.
Lenders do not have to lend the full amount (and right now students cannot request over $2,000). Instead, the site allows alumni to offer what they can, combining money from multiple lenders to hopefully reach the student’s full request. Both student and lender(s) sign an agreement to make the loan legal and binding. Then the money is sent directly to the school–not to the student–so the money is applied directly to college costs.
All the loans offered through UniThrive are interest-free–a great deal for the student–and students have until 5 years after graduation to repay them. UniThrive also focuses on creating a relationship between lender and borrower, encouraging interaction and mentorship.
As with any great deal, however, there are a few catches:
All in all, a very clever idea.
All the best,
Deborah Fox is the founder of Fox College Funding®, a nationwide company that helps families find creative ways to reduce their college costs.